AINDUSTRIAL TRAINING REPORT

ON

AMUL

As Partial Fulfillment of Master Of Business Administration Programme

(M.B.A. Sem III)

Submitted By:Bhavik G. Vadodariya

Academic Year:2005-07

Submitted To:Saurashtra University, Rajkot

DECLARATION

I , Bhavik Vadodariya , s tudent of MBA-III hereby

declare that the project work presented in th is repor t i s

my contr ibut ion and has been carr ied out under

supervis ion of Prof . Manish Bhaya of T.N.Rao Col lege of

Management Studies , RAJKOT .

This work has not been previously submit ted to

any other univers i ty for any other examinat ion.

Date:

Place: RAJKOT.

Signature

Bhavik Vadodariya

ACKNOWLEDGEMENT

Industr ia l t ra ining is very important in

management s tudies . During this t ra ining s tudents i s

helped by many people . As a s tudent of M.B.A of

T.N.RAO COLLEGE OF MANAGEMENT STUDIES , I

would l ike to express my s incere thanks too a l l those who

helped me dur ing my pract ical t ra ining programmed.

At very outset , I would l ike to give my hear t i ly

thanks to Mr. J.K.Joshi who Permit ted me to get t ra ining

a t AMUL.I am very thankful to Mr G.D.Trivedi , who

arranged a l l poss ible vis i t of my at AMUL.

I am very thankful to the prof .of T.N.RAO

COLLEGE OF MANAGEMENT STUDIES

Mr.DHARMESH RAVAL SIR who ass is ted me to have

pract ical exposure a t AMUL DAIRY.

I am very thankful to the SAURASTRA

UNIVERSITY. and our col lege for organiz ing such

Training programmed. I would l ike to express my s incere

thanks too my professors for developing thei r guidance

and help .

PREFACE

In every professional course, training is an important factor,

profession give us theoretical knowledge of various subjects in the

college but they are practically exposed of such subjects when they get

the training in the organization. It is only the training through which we

know that an industry is and how it works. We a can learn about various

departmental operations being performed in thee industry which would,

in return, help me in the future when we enter the practical field.

The theoretical knowledge and conceited ideas are the enough

background for this career development but the practical training is also

having equal contribution for the purpose. It is true that “Experience is

the best teacher” The industrial training is the important in the

management education, because it aims at improving the education

level by giving it a practical direction and by making it socially and

individually relevant. The students have to prepare the report on this

training; this will enable them to develop corporate skills through on site

experience.

Thus, since the industrial training offer variety of advantages.

The SAURASHTRA UNIVERSITY offer such industrial training

consist of interesting and purposeful visit of various department of

industry like production, personnel, marketing, finance etc, It is thus,

training programmed is held for the taste of management application in

industrial world.

EXECUTIVE SUMMERY

The AMUL is a cooperative sector, it is the institution of

farmers, for the farmers and from the farmers. The AMUL give pleasure

to the farmer to charge the own price, which was not possible in earlier

years.

This union was born at 14th December 1946. The union

provides facilities to its members like more return, satisfactory price,

insemination, first aid, group Insurance, cattle food at concessional price

etc, Amul; dairy has a five main departments like finance, personnel,

commercial, milk procurement and production. The finance department

does the clerical work and take care of inflow and outflows of the cash.

The other work of finance Department is to audit of annual work.

The personnel department handles the work regarding

Personnel like Appointment, recruitment, promotion, transfer, dismissal,

Demotion, performance appraisal etc,.

The commercial department conducts all promotional activities

of local area. The pricing decision of milk and buttermilk is taken at

commercial department. The marketing work is handle by GCMMF.

The production department produces the product with the help

of latest technologies. The production is done according to ISO marks

requirement.

The milk procurement department gets the milk every day two

times from 92 routes and 1059 societies. For the maintenance of quality

of milk there are 150 chilling units.

TABLE OF CONTENTS

Sr.No. PARTICULARS

1Acknowledgement

2Preface

3Executive summery

4General information

5Human resource department

6Marketing department

7Production department

8 Finance department

GENERAL INFORMATION

INDEX

Sr.No.

Particulars Page no.

1 History and development of Amul

2 Size of unit and form of organization

3 Manufacturing process and products

4 Organizational structure

5 Time keeping system

6 Employee services

7 Contribution of the unit to the industry

GENERAL INFORMATION

NAME OF THE UNIT

The kaira district co-operative milk producers union ltd.

Anand.

ANAND MILK UNION LIMITED ( AMUL)

FORM OF THE UNIT

A co-operative sector registered under the co-operative act

on

14th December 1946.

SIZE OF THE UNIT

Production of different products, are on large scale, besides the

whole organization is also very large. It collects 9 lakhs liters of milk

and produces milk products in bulk quantity.

REGISTERED OFFICE

Kaira district milk producers union limited, Anand –388001.

NUMBER OF PLANTS

1 Anand plant

This plant is engaged in manufacturing of milk, butter, milk powder,

ghee, flavored milk and buttermilk

2. Mogar plant

The plant is situated on National High way –8 (Anand-Vadodara)

This plant produces chocolates, coco powder, coco butter.

3. Kanjari plant

The plant is situated between Anand and Nadiad. This plant is engaged

in manufacturing of cattle feed.

4. Khatraj plant

This is situated between Nadiad and Mahemdabad. This plant produces cheese.

5. BANKERS

a. Kaira district central co-operative bank ltd.

b. U.T.I Bank

c. Corporation Bank

d. S.B.I

e. State Bank Of Saurashtra

f. Oriental Bank of Commerce

HISTORY AND DEVELOPMENT OF THE UNIT

In the year 1946 the first milk union was established. This union

was started with 250 liters of milk per day. In the year 1955 THE

AMULwas established. In the year 1946 the union was known as THE

KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION

LTD. This union selected the brand name AMUL at 1955. The brand

name Amul means”AMULYA.” This word derived form the Sanskrit

word “AMULYA” which means “priceless”.

In the early 40’s, the main sources of earning for the farmers of

kaira district were farming and selling of milk. That time there was high

demand for milk in Bombay. The main suppliers of the milk were Polson

dairy limited. Which was a privately owned company and held monopoly

over the supply of milk at Bombay from the kaira district. This system

leads to exploitation of poor and illiterates’ farmers by the private traders.

The traders used to beside the prices of milk and the farmers were forced

to accept it without uttering a single word.

However, when the exploitation became intolerable, the farmers

were frustrated. They collectively appealed to Sardar Vallabh bhai Patel,

who was a leading activist in the freedom movement. Sardar Patel advised

the farmers to sell the milk on their own by establishing a co-operative

union, Instead of supplying milk to private traders. Sardar Patel sent the

farmers to Shri morarji desai in order to gain his co-operation and help.

Shri desai held a meeting at Samarkha village near anand, on 4th January

1946. He advised the farmers to form a society for collection of the milk.

These villages’ societies would collect the, milk on their own and would

decide the prices at which they cancel the milk. The district union was

also form to collect the milk from such village co-operative societies and

to sell them. It was also resolved that the Government should be asked to

buy milk from the union.

However, the govt. did not seem to help farmers by any means. It

gave the negative response by turning down the demand for the milk. To

respond to this action of govt., the farmers of kaira district went on a milk

strike. For 15 whole days not a single drop of milk was sold to the traders.

As a result the Bombay milk scheme, was severely affected. The milk

commissioner of Bombay, then visited Anand to assess the situation.

Having seem the condition, he decided to fulfill the farmers demand.

Nehru, the prime minister declare it open Amul dairy has

their big vast and modern Plants.First plant at Anand it engaged in

the manufacturing of milk, butter, ghe

Thus their cooperative unions were forced at the village and

district level to collect and sell milk on a cooperative basis, without the

intervention of Govt.. Mr.Vergeese Courian showed main interest in

establishing union who was supported by Mr.Tribhovandas Patel who

lead the farmers in forming the Co-operative unions at the village level.

The kaira district milk producers union was thus established in anand an

was registered formally on 14th December 1946.since all the milk was

sold in anand through a cooperative union by farmers, it was commonly

resolved to sell the milk under the brand name AMUL.

At the initial stage only 250 liter of milk was collected everyday.

But with the growing awareness of the benefits of the cooperativeness, the

collection of milk increased. Today, Amul collect 9 lakhs liters of milk

everyday. Since milk was a perishable commodity it become difficult to

preserve milk flora longer period. Besides when the milk was to be

collected from the far places, there was a fear of spoiling of milk. To

overcome this problem the union thought out to develop the chilling unit

at various junctions, which would collect the milk and could chill it. So as

to preserve it for a longer period. Thus, today Amul has more than150

chilling centers in various villages. Milk is collected from almost 1059

societies.

With the financial help from UNICEF, assistance from the govt.

of Newzeland under the Colombo plan, the technical assistance provided

by FAO,of Rs. 5 million factory too manufacture milk powder and butter

was Planned. Dr.Rajendra laid the foundation on november15, 1954

Prasad, the president of India. On November, 1955, Pandit Jawaharlal e,

milk powder, flavored milk and butter milk. Second plant at Mogar

which engaged in manufacturing chocolate, nutramul, coco powder and

coco mass. Third plant at Kanjari which produces cattelfeed Fourth

plant at Khatraj, which engaged in producing cheese.

Today, twelve dairies are producing different products under the

brand name Amul. Today Amul dairy is no.1 dairy in Asia and no.2 in the

world Which is producing for Gujarat and whole India.

STAGES OF DEVELOPMENT

The Amul is the cooperative union which successed with the slow

and steady growth. The Amul start with one society and now it is

converted into a union with 1059 societies. At the beginning Amul collect

only 250 liters of milk per day. now a days Amul collect 9 lakhs of liters

of milk every day. The excess of milk lead the Amul to develop the milk

products. The Amul develop step by step. The main stages of

development are as follows.

IN 1954

In the year 1954 UNICEF provide the financial help worth of Rs.5

corer to the Amul. This financial help lead Amul to established fully

automatic plant for producing milk and milk powder.

IN 1958

In this year Amul expand the plant and started to produce

sweetened condensed milk.

IN 1960

The excess supply of milk in the winter season and huge amount

of profit make possible the expansion of Amul. The Amul established

new units for producing chasse and baby food. This create history in the

dairy products, because it was the first time where cheese and baby food

is produced from the buffalo milk.

IN 1981

The new cattelfeed plant was established at Kanjari

IN 1992

For getting the benefits of excess supply of milk, Amul

established the another plant named Amul-3. This plant has capacity of

producing 14 lakhs of milk everyday.

IN 1994

The new cheese plant was established at Khatraj and Chocolates

plant established at Mogar. These two plant started with help of NDDB.

IN 2001

For providing the quality milk at any time,Amul launch the new

flavored milk. These flavored milk available in four different taste.

IN 2003

For expanding the market share Amul launch the “SNOWBALL”

pizza and flavored lassi. This give the new market share to Amul in the

area of fast-food.

IN2004

The Amul keeps on achieving new highs in this competitive word,

it will launch CHOCHOZOO [Chocholate], MUNCHTIME [Gathiya].

The Amul also start the new SATELITE DAIRY AT PUNE. This

will help Amul in expanding milk marketing other state.

PRODUCTS OF AMUL

1. Condensed milk

2. Amul baby food

3. Amul ghee

4. Amul nut

The Amul produces two type of products for the selling purpose.

The first one is consumer product and other one is industrial products.

The industrial products are actualy by products of the Amul.

CONSUMER PRODUCTS

5. Pasteurized milk

6. Cheese

7. Butter

8. Amul milk powder

9. Amul spray

10. ramul

11. Amul dan i.e.Cattelfeed

12. Chocolates

13. Amul misty dahi [CURD]

14. Amul butter milk

15. Amul lassies

16. Amul Gathiya [Munch time]

17. Amul mithayee

18. Amul ice-cream

19. Amul flavored milk

20. Amul paneer

21. Amul fresh cream

22. Amul shrikhand

INDUSTRIAL PRODUCT

1. Coco butter

2. Coco powder

3. Coco mass

4. Cream

TIME KEEPING SYSTEM

The Amul is the organization which is engaged in the

production of those products which are used in the day to day

consumption. Hence Amul carries out 24 hours of production

activity without any interruption. As a result time keeping system

comprises its own importance.

Generally a muster roll is prepared in the personnel

department which is maintained by the time keeping officer. While

entering the organization, each and every employee has too sign

this muster as a proof of his attendance in the organization. This

muster roll keeps all details of the employee like the employee

name, his address, pay roll, no. of leaves left to his accounts etc,.

Amul basically runs in three shifts those are

1st shifts : 08:30 a.m. to 04:30 p.m.

2nd shifts : 04:30 p.m. to 12:30 a.m.

3rd shifts : 12:30 a.m. to 08:30 a.m.

EMPLOYEE SERVICES

The Amul provides best services to their employees. Even Amul

is the corporative sector, it provides best services to their employees. The

Amul provides following services like,

1. CANTEEN :

Amul has its own canteen for its workers as well as for the staff

members. All the workers of the organization gets food, tea, coffee, milk,

breakfast etc, at the discount rate for example tea and coffee at 50 paise

per cup, dry food at Rs. 8 per kg, lunch at just Rs. 5 per dish.

2. MEDICAL FACILITIES :

Amul has its own medical dispensary with in the organization. It

provides free medical treatment to a workman and his family for a major

treatment and medical assistance it has contract with the emergency

hospital, Anand.

3. EDUCATION FACILITIES :

The Amul is also given education facilities to workers children

maximum to Rs. 1000/- and scholarship.

4. ADVANCE FACILITIE

There is an advance payment facility to a workman in each month

on every 20th day of month the workers are given Rs.150 as an advance

from his salary.

5. COLD WATER FACILITY :

Amul provides comprehensive service of cold water to its worker.

A sufficient number of water centers are maintained.

6. UNIFORM FACILITY

In every two year, the workers are given two pairs of uniform.

They are made of good quality. The washing of uniform is done at Amul.

7. PERSONNEL ACCIDENT POLICY :

The amount for this is set up for every worker category wise. The

premium is paid by the organization on behalf of the workers. In case of

any accident this policy is very useful for the workers.

8. REST ROOM FACILITY :

There is a rest room facility in the organization for worker. So that

they can take rest during their intervals and free time. It covers sufficient

number of light, fan, toilet, bathrooms and again services of personnel

lockers. So that employee can put their things in the locker.

9. FREE ANIMAL VACCINATION :

Amul offers free vaccination of animals on a seasonal bases.

Often animals are caught up in unknown severe diseases. To protect the

animals from such diseases periodical vaccination programmes are

arranged for the animals of the farmers.

10. SAFETY :

Amul also provides hand gloves, goggles, shoes, cap for workers’

safety.

11. ENTERTAINMENT FACILITIES :

The Amul has its own Amul club and social and cultural

activities. Amul also held tour and visit of some places. Amul also held

camp for workers’ entertainment.

12. OTHERS :

Diwali bonus

Loan t the worker

They are also given two set of dress

They are given traveling allowances.

They are given Ghee coupons at discount rate. If they want

to purchase Ghee than workers has to pay 19.50 Rs. Instead of 30 Rs.

And excess money provided by Amul.

CONTRIBUTION

“Amul” is the successful co operative sector, matter of proud of

Gujarat and also for India. It is said that “ scattered pearls cant make a

neck less.” It is true in the relation of farmers and their co operation for

success of Amul.

The brand name itself Indicates how Amul is separated over the

country and world. This unit produces variety of goods made from milk.

The production lasts for 24 hours a day. Moreover, for the quickly quality

of products an “Australian Committee “ visits the unit at the regular basis.

This unit has been contributing in the exports for long time.

Amul gets so many awards for its productivity and performance

Amul is Asia’s no. 1 dairy and second in whole world which is matter of

proud for India. Amul’s contribution is valuable to the Indian economy.

In our country every man and now even small children know what

Amul is at a glance, this makes the popularity and contribution to the

dairy industry.

HUMAN RESOURCE DEPARTMENT

INDEX

Sr.No. PARTICULARAS Page No.

1 Organization of personnel department

2 Recruitment selection and induction

3 Training and Development management

4 Job description [Managerial levels only ]

5 Promotion and transfer policy

6 Performance appraisal system

7 Wage and salary administration

8 Working of E.S.I scheme

9 Study of provident fund scheme

10 Grievance handling procedure

11 Collective bargaining and agreement

12 Trade unions

13 Personnel records.

INTRODUCTION TO HUMAN RESOURCE

DEPARTMENT

There is one popular theme in the management “MAN IS

MASTER “ and Amul follows this theme. Generally organization is run

with the help of five Ms viz. MAN, MONEY, MATERIAL, MACHINE

AND MARKET. However it is impossible to seems the organization

without human resource. Thus human resource comprise the value of the

organization by effective and efficient work.

The human resource management has thus become important to

manage the human resources properly in the organization. Therefore, the

organizations involves human resource department to take care of human

aspect in the organization. This department deals with the planning,

organizing, directing, directing and controlling of manpower in the

organization. In other words, human resource department deals with the

issues like manpower planning their recruitment, selection, training and

development, motivation and direction, wage and salary administration.

Performance appraisal, promotion, demotion, transfer, negotiation,

grievance handling, industrial relations etc,.

Now the question arises as to why human resource management is

necessary part of organization? As we know except man, all the other

factors of production are passive factors of prediction. Man is an active

factor of production and his efficiency and skills can be improved through

motivation and training. Thus if the human resources of an organization

are sound and are well aware of their duties, they will put whole hearted

efforts to achieve the organizational goals.

Hence, the human resources management is the prime aspect for

any organization be it a profit or non profit, private or public and alike

ORGANISATION OF HUMAN RESOURCE DEPARTMENT

MANAGING DIRECTOR

ADMINISTRATIVE MANAGER.

Legal and Recruitment Personnel Training Security Industrial apprenticeship records ISO Audit andRelations senior senior senior guestDy. Supdt. Officer officer officer senior

officer

Legal Supdt. Assistant. Peons Telephone Postal Operator Dispatch

Muster Dispensary keeper Security Guest Nursery house Charge

Amul has different departments for working. Human resource

department is one of the important department of Amul. There is a very

vertical kind of “human resources department.” At the top there is a

managing director. Under the managing director, administrator manager is

working. Dy. Supdt of legal and industrial relations senior officer of

recruitment apprenticeship, senior officer of recruitment training [ISO

Audit] and senior officer of security and guest house division are entitled

to report to the ‘Administrator manager.”

Legal decision are handle by Dy.Supdt. of legal and industrials

relations. Muster keeper, dispensary organization and nurses are handled

by senior officer of recruitment apprenticeship. Similarly peons,

telephone operator and postal dispatch are working under senior officer of

personnel records. Security and guest house charge is responsibility of

senior officer of security and guest house. Thus. Amul has a systematic

structure of human resource department.

RECRUITMENT

On the basis of manpower planning, the sources of recruitment

are found out in order to recruit the fight person t fill up the vacancy.

Recruitment is thus the process of identifying the prospective employees

and encouraging them to apply for a particular job. It is the process of

searching the sources of manpower to meet the actual of potential job

positions in the organization.

There are three methods for recruitment.

Direct method.

Indirect method

Third party method

Since Amul is a reputed cooperative organization, it does not

need to search for the sources of manpower. Fortunately, it has been

receiving number of application every year from which it choose the type

and number of persons in accordance with the job. Thus for clerical and

workers post, they check the secondary sources i.e. the job application

received by Amul for various posts.

However, in case of the posts for the officers or managers,

sometimes Amul choose to have direct recruiting of personnel from the

open market which may suit the job.

Basically, there are four types of recruitment processes adopted

by Amul.

1. Graded scale.

2. Recruitment under union scheme.

3. Recruitment as temporary workers.

4. Recruitment under various apprenticeship etc,.

1.GRADED SCALE ;

In this type of recruitment, employees are recruited In two ways

under the graded scales. Firstly, well qualified and experienced persons

are considered. Secondly fresh graduates from well known institutions

like IIM, IRMA, etc,. are considered.

2.RECRUITMENT UNDER UNION SCHEM :

This scheme is selected by Amul dairy. According to this

scheme M.S.W., M.L.W., MRIT, DCA and BBA candidates are recruited

as trainee. Training period for BBA students is one year and stipend is Rs.

1500 per month. For engineers training period is one year and stipend is

Rs.1200 per month, for MA cooperation training period is three years and

stipend is Rs. 1200 per month for the first year, Rs. 1500 per month for

the second year and third year. For diploma engineers training period is

two years and stipend for first year Rs. 1000- per month and second year

Rs. 1100 per month.

3. RECRUITMENT OF TEMPORARY WORKERS :

Under this scheme, workers are recruited temporarily for three months, then they are recruited as trainee workers. Their training period is for three years. Amul pays them salary [per month in these three years. If their work and attendance are felt satisfactorily to the management, then such workers are selected as permanent employees.

4. RECRUITMENT UNDER APPRENTICESHIP ;

Under this, Amul recruits the employees under the rules of the apprenticeship acts of 1961, 1973, 1986.

SELECTION

Selection procedure is concerned with securing relevant

information about the applicant. The main objective of selection process

is to determine whether an applicant meets the qualification for a specific

job and choose the application who is most likely to perform well in the

job. In amul, rating are noted for general knowledge, experience,

knowledge of that particular field etc,. these ratings are then combined

and the [person with highest scores are then selected and sent for medical

examination. The applicant who are physically fit are sent the

appointment letter which contains some terms and conditions of the job.

The candid date will have to sign on this litter which indicates that he is

ready to strictly obey these terms and conditions. Higher level and middle

level employees are to be recruited, directly and selected by the

committee.

SELECTION PROCEDURE

VACANCY IN ANY DEPARTMENT.

DIRECT APPLICATION.

COLLECTION OF APPLICATION.

SCRUTINISING OF APPLICATION.

INTERVIEW.

MEDICAL CHECK UP.

SELECTION.

INDUCTION

When the trainee is become a permanent then induction programme is held by the organization. Induction is a technique by which a new employee is rehabilitated into the changed surrounding and introduced to the practices, policies and purposes of the organization. It is a welcoming process. The idea is to welcome a new comer and generate him feeling that his own job. Induction programme is also done by Amuil.In Amul induction programme is one week of one day for new comer. They give also the information about production or manufacturing process and provided visit to Mogar plant and Kanjari plant. An employee of plant is introduced will all the members of plant.

TRAINING AND DEVELOPMENT MANAGEMENT

Every person is not a person with norm skills. In other words, every person does not have the knowledge of every thing. He has to acquire such skills and knowledge through learning. Thus training is the best measure for improving the knowledge and skills to the employees. It is the process of sharpening the skills of the employees. It is the short term process utilizing the systematic and organized procedure through which non managerial personnel get technical knowledge for a specific job related purpose. On the other hand, development is a long term educational process utilizing the systematic and organized procedure through which managerial personnel learn theoretical and conceptual knowledge for general purpose and personal development.

However, in Amul, the training is one and same for all the managerial levels. Amul organize two days programme every month in order to train the newly recruited persons as well as to refresh the knowledge of the old employees and managerial personnel, amul call the central Board of Govt. education to impart training. The training includes subjects like self confidence, high morale, job complexities, technology development etc,. during the training programme, Amul organize the stay facility for the out siders.

Basically, Amul follows three kind of training practices of the training like,

1. On the job training :

Under the kind of training, the employees of Amul are given training in the conference hall of the organization as discussed above. This would include discussions followed by the expert committee of Amul. Sometimes the doctors of animals come to train the farmers of the ways to maintain the cattle.

2. Off the job training :

Under this kind of training, Amul organizes the training programme outside the organization. Amul organizes lectures and seminars quite often at out side of the organization.

3. Out house training :

Under this type, Amul sends his employees outside to gain training. This would mean sending employees I the expert field to gain technical knowledge.

JOB DISCRIPTION [ MANAGERIAL LEVEL ONLY ]

of each and every office is clearly defined. In administration

department following responsibility are given t various officers.

1. Guest house.

2. Training and Appraisal

3. recruitment and selection.

4. Personnel records.

Job description describes the work performed, the skills

required, any specific conditions under which the job is to be performed

and the personal traits required for the performance. A good job

description gives a clear and easily, understandable picture of the job. It

also gives all the main tasks of the job and how ate they performed with

the help of job description. The organization is able to list the

qualifications experience, any special personal traits and attributes

required in a person to perform a particular job.

In this particular unit responsibility

5. Conformation.

6. Promotion and transfer.

7. Time keeping and labor.

As all the officers have clear responsibility they do their job with

loyalty and accurately the honestly and regularity in their work calls for

effective working environment.

PROMOTION AND TRANSFER POLICY

PROMOTION :

A promotion is an upward movement of employee in the

organization structure, generally with the increases in status authority,

responsibility and pay scale.

Amul mainly follows two kinds of promotion policy.

1. Automatic promotion or periodic.

2. Merit cum seniority.

Amul adopts from time to time different types of promotion

policies

During the period of 1972, there was a negotiation with

the union that promotion was given automatically to a person who had

completed his or her six years in job, and second promotion was given

after seven years.

Then Amul adopted merit system cum seniority system.

And now, Amul has implemented the merit based

promotion system. Under this policy, performance of the employee his

past records, behavior, opinion of divisional heads etc, is taken in to

account while considering a promotion of employee.

Generally the managing director signs the promotion order

after the recommendation by the personnel and administration

department.

Promotion policy is largely depends on performance of all

employees.

TRANSFER :

Transfer is horizontal or lateral movement of an employee from

one job section department, shift plant and position to another at the same

another place were his salary status and responsibility are the same.

Amul gives first preference for transfer to those who are coming

from local areas. Normally Amul gives transfer to adjust the work force of

one plant to other. There is no fix transfer policy. Some time temporary

transfer also given to employees.

PERFORMANCE APPRAISAL SYSTEM :

Performance appraisal is the process of evaluating the performance and qualification of employers in terms of the require of the jobs for which they are employed. It is highly useful in making decision regarding the promotion, transfer, wage and salary administration etc,.

Two types of appraisal system is adopted by Amul.

1. For the newly joint

2. Promoters from one place to another.

The Amul adopts the following appraisal system

1. For newly appointed :

PROMOTIONPERIOD

APPRAISAL FOR

1ST year Officer and managers.6 months Assistants3 months Workers3 appraisal every year Officers and workers.4 months Cadets.

Final confirmation with the recommendation by the divisional

heads comes from the MD on annual basis. His work is evaluated and if

his work is not found satisfactory, he is terminated from his job. At

present Amul has adopted open system under which the employee himself

writes in which work he needs training and asks to the management to

arrange for it.

WAGE AND SALARY ADMINISTRATION :

It is a universal fact that no one will work without any reward.

Thus an employee has to be properly rewarded for his services rendered

to the organization. He should be paid reasonable wage or salary. The

salary or wage is the remuneration for his service to the organization. At

Amul, wages and salaries are paid on monthly basis. A time rate wage

system is followed by the organization. The salary of an employee would

include basic salary plus allowances like house rent, medical allowance,

clearness allowances, performance allowances, festival allowances, travel

allowances, education and development allowances, leave allowances

etc,. Besides provident fund is also paid out from the monthly salary.

A common method is followed for the wage and salary

administration. The present catalogue record received from the time

keeping officer is maintained of each employee in the register which is

known as “Muster Roll “Time keeper sends those muster roll to the

account department attendance of each and every employees. This will

analyzed and entered in the computer. The report is scrutinized and

statutory and non statutory deductions ate made. After this salary is

calculated for each employee through computer.

The wages are paid in cash and also credited to their savings or

current ccount. The wages and salaries paid according to the grade

wise. Amul delegates grades like A, B, C, D, E, F, and G.

WORKING OF E.S.I. SCHEME :

The full form of E.S.I. scheme is EMPLOYEES STATE

INSURANCE. In Amul, there is workman compensation scheme is also

used.

WORKMEN’S COMPENSATION SCHEME :

This scheme is made for the purpose of any accident workmen

compensation is the amount of money paid to any worker in case when he

meets with an accident while working in the unit. If any accident happens

with any of workers, within the unit, then that person examine first by

doctor , and doctor gives the report where in the name of injured worker

types and nature of injury where and how it is happened etc,.is to be noted

out in one report.

Then the employee average wage is calculated and according to

this calculated average wage schedule is prepared in labor form. The

amount of compensation for death of the injury and disbursement in

respect of different wages is given in schedule.

When employee recovers from his injury that time doctor issued

a fitness certificate that employee ready to rejoin in the work. This is the

facilities provided by Amul for their workers safety and during that

working times.

STUDY OF PROVIDENT FUND SCHEME :

The provident fund scheme for the industrial employee is

adopted by the company for their retirement and spirit of saving. The

central government is providing this type of scheme for the welfare of the

employees, their provident fund and miscellaneous provision Act, 1955.

Provident fund commissioner of state decide contribution on salary that is

10% and also 12% interest of annual accounts are to be prepared for

accumulation of provident fund. Surplus amount of provident fund is to

be invested in central and state government. It is accumulated as opening

balance + interest + contribution during the year + closing balance.

Nomination of an employee is assured as soon as they becomes a member

of provident fund scheme. If no nomination is assured that instead of it

one has to get succession certificate. This certificate is required from

court

GRIEVANCE HANDLING PROCEDURE ;

There would hardly be a company or industrial concern which

function absolutely smoothly all the time. The employees have complaints

against their subordinates or supervisor, or reverse may be the case.

Broadly speaking a complain affecting one or more workers constitutes a

grievance.

In Amul, there are day to day problems of workers. To handle

those problems a grievance handling procedure is established. There are

some committees like work committees, safety committee, canteen

committee, employee committee, engineering committee etc,. These

committees handle all problems and try to solve them. Safety committee

is very important out of all committee in which accident awareness is

thought.

First of all, employees is given opportunity to express his

problems to their supervisor. If the supervisor fails to settle the grievance,

he is sent to the manager. Their face to face discussion is done regarding

grievances of employees. Manager will be the

ultimate person to solve the problem in the organization because

otherwise the problem will be taken care of by the above committees.

COLLECTIVE BARGAINING AND

AGREEMENTS ;

Collective bargaining is a procedure by which the terms and

condition of employment of workers are regulated by agreements between

their bargaining agents and the employers. In this process the objective is

to reach agreement on wages and other conditions of employment about

which the parties began with divergent view points but try to reach a

compromise collective bargaining rules out the intervention the third

party.

In Amul the problems relating the salary and working condition

are solved by the representatives each from employees and management.

Management representative get the demands form employees

representative. Then they discuss and analyzed them and made decision.

They both have on intention to reach a compromise. In this unit healthy

relationship between management and labor has been maintaining for a

long time.

TRADE UNION :

Trade unions as we know exist in almost every organization.

Trade unions are the typical unions made up of employees of that

particular organization. Generally trade unions are formed by the

employees in order to get better working conditions better pay scales and

to perfect themselves from exploitation. Trade unions perform the basic

activities of discussions and negotiations with the management regarding

the issues of conflict.

At Amul there are tree trade unions in existence. One trade

union is for workers the other is for clerical staff and finally one is for

officials.In the initial stage there were many strikes had for 2to 3 days for

workers. Last strike was for 10 days In the year 1985. however since then

Amul has been faced harmonious relations with trade unions. Since Amul

is a co operative organization each member of trade union works as a

member of the Amul family. Further more Amul holds the monthly

discussions with all their employees to share with them the problems they

might be facing. This awakens the mutual under standing between the

management and employees.

PERSONAL RECORDS :

Amul is a co operative society where joints efforts are made of

involved and due to the joint efforts, Amul is a huge family. All document

of all employees are presented under the personnel records. Personnel

records means systematic records of all the employees working in Amul.

The following documents are prepared in Amul for the record of

employees.

1. SERVICE ROLL :

Service roll a role in which all new employees names are to be

registered with their grade service. Roll is a big file with many

columns like employee number, full name, designation,

qualification, date of birth, transfer, promotion etc,.

2. DOCKET FILE :

In docket file al the certificates or their important documents of

employee are to be field. There is different dock file for each and

every employees.

3. MUSTER FILE ;

Muster keeper is file In which day to day presence and absence

is to be noted. Accordingly salary is adjusted.

4. SENIORITY FILE :

Seniority file consists of grade and post which is to be chances

after every six months. If we want to promote any employees his

seniority is to be checked or it is done on merit basis in all the

departments. There is a grade table for different cadre i.e. managers,

officers, clerical staff, technical and other workers etc,. employees in

the organization.

MARKETING DEPARTMENT :

INDEX

SRNO.

PARTICULARS

1.. Introduction.

2. Organization of marketing department.

3. Product planning.

4. Market segmentation.

5. Pricing policy.

6. Channel of distribution.

7. Sales promotion.

8. Advertising.

9. Marketing research.

INTRODUCTION :

Every organization that produces one or more products require

marketing of the product to sell them in the market. It is only through

marketing that people know about a company’s products. Hence

marketing is considered as a key activity of organization. The

organization require sound marketing structure to carry on its marketing

activities.

In the word of PHILIP KOTLER, “Marketing is a process where

by the consumer and groups obtain what they need and want by creating,

offering and exchanging goods of value with one another.” Thus

marketing is the acting of satisfying the customers by offering them the

product and services of the organization. Only the ability to produce good

will not suffice unless the company has the good marketing structure to

sell those goods and services. Thus for a firm to be succeed, marketing is

the important element to be considered.

However the concept of marketing is not confined only to selling

of goods and services to customers. Instead the company try to create and

maintain the customer base through marketing. The marketing thus focus

on the customer needs and wants in the market and emphasis on

producing and selling only those goods which have higher demand in

market. The company mainly market its products through advertising.

Marketing uses various sales promotional tools to boost the sales of the

company. The marketing department thus should have sound distribution

channel and promotional system to make the marketing activities sound.

ORGANISATION STRUCTURE OF MARKETING

DEPARTMENT

MANAGING DIRECTOR

DEPUTY MANAGER

Product-dispatch manager. Superintendent.

Dy. Supdt.

Senior officer

Assistant

PRODUCT PLANING :

Before launching any products in the markets, it is very essential

to plan them properly by conducting its feasibility study in the market. It

is to be searched whether the people in the market would accept the

product or not. The organization has also to decide where to place its

product for sale i.e. in which segments to sell the product. Product

planning is thus the starting point for the entire marketing programmed.

The product planning is generally done well in advance, before the

product is manufactured. Product planning is very essential for the

organization to make changes in the products or to produce such products

which are sellable in the market i.e. which can fulfill the desire of

customers Since Amul produces and sell the perishable product i.e. milk,

it has to plan its product very carefully so that the consumer get only good

quality products.

At Amul, the product planning at national level is done by

“GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION

LIMITED. “[ GCMMF ]. It is the duty of GCMMF to plan the new

product by conducting the market survey at the state and national level.

However, issues of product launch at the local level are taken care of by

Amul itself. The Amul has set up the commercial department which

conducts the surveys in the local areas through business. Administration

students to check the feasibility of the new product. The new product

decisions are also taken by the GCMMF.

MARKET SEGMENTATION ;

Generally the market consists of buyer and the buyer differ in

many ways. The buyers may be differentiate as per their age, sex, region,

education, profession. Social class, habits, personality and many such

factors. The market can thus be segmented in number of these ways

considering the various aspects of the buyers. Market segmentation is

very essential for the organization because it is not possible for the

organization to market its products in a whole market. Instead, it can

segment and market is products in that segment so that it can concentrate

more on a particular market. At Amul, since the

marketing activities are handled by the GCMMF, market segmentation is

also decided by GCMMF. The GCMMF determines the market size and

market its product accordingly in the market so that the product can be

easily sold in the market. Generally milk and milk products like butter,

cheese are popular in the all age groups. Hence they are segmented at the

national level. Milk products like chocolate and milk powder are

segmented on the basis of age, that is for children but they are also

marketed at national level. The GCMMF conduct the market survey to

know the demand for the products of Amul in the market and then

accordingly determines the market segment, defines the target market and

emphasis on the demand of population in that particular segment. The

GCMMF has developed the marketing information system which takes

care of such issues.

THE PRICING POLICY :

Price is all around us. We generally pay different payments like

rent, fees, fare, interest, etc, in terms of prices. In this sense, all profit and

nonprofit organization decide pricing policy and set process other

products and services. Price is the only element in the

product mix that product revenue, the other elements produce costs. The

price is also one of the most flexible element of marketing mix, in that it

can be changed quickly, unlike product features and channel

commitments. At the same time, pricing competition is the crucial

problems facing many companies. Therefore decisions regarding pricing

should be taken well in advance and all aspects affecting the pricing parts

should be given prior and deep concern. A firm should be aware of price

conditions in the market for the kind of product it is launching, for the

higher prices might ruin its market share. On the other side if the price is

too low the firm will not be able to cope up with its production and

marketing costs. Hence pricing decisions should be taken with ample

care. Since the marketing of the Amul’s products is handle by the

GCMMF, the prices of its products are also decided by the GCMMF. The

GCMMF conducts the market survey to check the validity and feasibility

of prices in the market and accordingly decides the prices of Amul

products. However, the price is inclusive of several elements like,

Cost of milk.

Labor cost.

Processing cost.

Packaging cost.

Advertising cost.

Excise duty and taxes.

Sales promotion costs.

Transportation costs.

Commissions to sales person etc,.

The GCMMF considers all these cost aspects and set them

up in pricing structure to decide the selling price of milk and milk

products

CHANNEL OF DISTRIBUTION :

It is not possible for a company to sell its products directly to

each and every customer since the market is fragmented. Between

producers and consumers stands a marketing channel a host of marketing

intermediate performing varieties of functions. The intermediates are

there with different names. There are some intermediaries like wholesaler,

agents and facilitators in the channel of distribution.

Amul has developed federation and Amul parlors located in several parts

of country. The GCMMF handles the work relating to managing of stocks

and distributors in the country. Thus GCMMF looks after the

disbursement of products to the various marketing channels.

Amul mainly handles milk, butter and ghee which are distributed

through following channels.

CHANNELS OF DISTRIBUTION FOR MILK ;

MILK

WHOLE SALERS

RETAILERS

CUSTOMERS.

CHANNEL OF DISTRIBUTION FOR BUTTER AND GHEE :

PRODUCTION CENTER[ BUTTER & GHEE ]

FEDERATIONS

60 DEPOS [ CITES ]

OFFICERS

RETAILERS

CUSTOMERS

SALES PROMOTION :

Sales promotion consist of a diverse collection of incentive

tools, mostly short term designed to stimulate quicker and grater purchase

of particular products or services by consumer of the trade. Sales

promotion offers an incentive to buy. Sales promotion

includes tools for consumer promotion e.g. samples, coupons, price off,

process premiums, free trials, warrantee, Demonstration, contests, good

merchandise allowances, co operative advertising and display allowances,

dealers sales contents and sales force Promotion tool etc,. Sales promotion

enable manufactures to adjust to short term variation in supply and

demand. They include customers to try new product but stay in touch with

the existing products. The sellers use incentive type of promotion tools to

attract new customers to reward loyal customers and to increase the

repurchase rates of occasional users, sales promotions often attract the

brand switches and turn them in to loyal brand customers.

Major decision in sales promotion :

1. Establishing the sales promotion objectives.

2. Selecting the sales promotion tools.

3. Developing the sales promotion program.

4. Pre-testing the sales promotion programmes.

5. Implementing and controlling the sales- promotion

programme.

6. Evaluating the sales promotion results.

Amul promotes its products through

exhibitions,

advertising in related industrial magazines, news papers, T.V.

and contracting

the potential customers personally. Further the company believes

in the term

satisfied customers are their sales representatives and it gets

repetitive orders

from its any customers.

ADVERTISING ;

Companies that try to sell their products can never let the

public know that they have put their product in the market unless thy advertise

their product in media. Advertising is thus no. of the most common tools

companies use to direct persuasive communication to target buyers and public.

In the words of PHILIP KOTLER, “ Advertising is any paid form of non-personal

presentation of ideas, goods or services by an identified sponsor.”

Advertisements are the most cost effective way to

disseminate message. The company can easily attract the target customer

towards their products through advertisements. Further the customer can have

the knowledge of which products are available in the market at which process.

In which size and in which qualities only having seen the advertisement of the

company’s products. The companies use several magazines, radio, hoardings,

free sampling etc,.

The advertising work for Amul’s products is assigned to the

GCMMF. The GCMMF decides the advertising budget and finally uses several

medias for advertising Amul’s products. The GCMMF mainly advertises the

products through T.V., hoardings, newspapers, magazines etc,. Television is

however the best media for advertising Amul’s product on national basis. Amul

daily gives at least 7 to 8 flashes of its different advertisement on different

channels. The GCMMF however uses hoarding for advertising in local areas.

Hoardings designed on the creative basis attract the customer more.

MARKETING RESEARCH ;

Marketing managers often performs the marketing

research, a formal studies of specific problem and opportunities. In other words,

companies perform the SWOT analysis through marketing research. They may

request a market survey, a product preference test, a sales forecast by region

or research on advertising effectiveness.

“ Marketing research is the systematic design collection,

analysis and reporting of data and findings relevant to a specific marketing

situation the company.”

Amul performs the marketing research mainly to launch a

new products in the market. The purpose is checking the viability of the new

products in the target market for local area. Amul conducts the market survey

by appointing business administration students for conducting the market

survey. However to conduct the research on state or national level, Amul

assigns the marketing research task to organization, VADODRA.

PRODUCTION DEPARTMENT :

INDEX

SR.No. PARTICULARS

1. INTRODUCTION OF PRODUCTION DEPARTMENT

2. LIST OF PRODUCT.

3. THE MANUFACTURING PROCESS.

4. THE INTERRELATIONSHIP OF PRDUCTION DEPARTMENT.

INTRODUCTION OF PRODUCTION DEPARTMENT :

The Amul is started with only 250 liters of milk per day.

But now Amul collect average 6.5 lakhs of liters milk. At the initial stage, Amul

has not any problem regarding milk, but in the winter season there was excess

supply of milk. So, Amul has to sold out those excess milk at the low price or

Amul has to face loss. To removing these problems Amul take decision to set

up a plant to process the surplus milk into butter and milk powder.. With the financial help of UNICEF, union established a Rs.

5 million factory to manufacture milk powder and butter in November 15, 1954.

In 1958 the plant was expanded to manufacture sweet condensed milk. In 1960

the other branch is started, which can produce 600 tone of cheese and 2500

tones of baby food every year. In 1964 the other plant was established to

manufacture cattle feed on October 31, 1964. In 1994 third dairy and cheese

plant at Khatraj began in February 1994.

Today the Amul has three plant known as Amul1,2 & 3. All

three plant work 24 hours a day continuously. The all manufacturing process

done automatically. The production is done in the special machines. These

machines and the technology is imported from the TRETA PEAK company.

There is also facility of chilling of milk, so that the milk remain usable.

LIST OF PRODUCTS :

The company produces the products or services. Its

success mainly depend on the quality and types of the product. The product is

the thing, services, any thing which is offered to the customer for the selling

purpose. The products mainly of two kind. Amul also produces this two type of

products.

The two main products are,

CONSUMER PRODUCT

INDUSTRIAL PRODUCT.

Amul’s main consumer products are as follows.

1. Pasteurized milk.

2. Butter.

3. Cheese.

4. Amul milk powder.

5. Amul spray.

6. Condensed milk.

7. Amul baby food.

8. Amul ghee.

9. Amul nutramul.

10. Amul Dan i.e. cattle food.

11. Chocolate.

12. Amul masti dahi.

13. Amul butter milk.

14. Amul lassi.

15. Amul gathiya [ munch time ]

16. Amul mithayee.

17. Amul ice-cream.

18. Amul flavored milk.

19. Amul panner.

20. Amul fresh cream.

21. Amul shreekhand.

Amul also produces the industrial products. Actually these

industrial products comes from the ending process of production. It means they

are wastage or by-products of process.

The main industrial products of Amul’s are as follows.

1. Coco powder.

2. Coco butter

3. Coco mass.

4. Cream.

THE MANUFACTURING PROCESS.

For the manufacturing of processed milk as well as milk

product everyday milk is brought from 1059 village societies through trucks.

These all trucks are passing from 92 routes. Total 150 number of chilling

centers have been allotted to the village societies. These chilling centers are

allotted according to the quantity of milk being collected. Further the trucks

have the containers which are thermos shaped and hence protect the milk from

getting it spoiled. The milk comes twice a day i.e. in morning and evening.

Generally about 85% of the milk is the buffalo milk and the remaining is the

cow’s milk. Currently Amul receives 9 lakhs liters of milk everyday however it

has the capacity of handling 15 lakhs liters of milk everyday.

Milk is received first at the raw milk receiving dock. The

cans of milk are smelt, washed and sample is taken. The cans are than washed

by steam, chemicals and hot air.

While milk is brought to Amul, its temperature is generally

8 to 9 C. So milk is pasteurized i.e. it is heated first at 70.c to 80.c. This

processed kills the germs and bacteria from milk. Then milk is chilled at 30 to

40 C.temperature this protect the milk from getting spoiled. Then milk is stored

in bullet like containers. Amul has 8 such containers with the capacity of

maintaining 1.5 lakhs liters of milk each.

The processed milk is thus used for producing milk

products and the surplus milk is sent to villages and big cities in packing for

sale . there is a pouch machine for fulfilling this purpose which packs 500

grams of milk in pouches. Milk is supplied to all the metropolitan cities. It is sent

Mumbai on daily basis. It is also sent to Delhi and to Kolkata.

The manufacturing process for several products are as under.

1 BUTTER : In the plant, there is a machine called separator vessel,

which counts the facts of the milk and separates the excess facts from the milk.

This excess fat is used t manufacture butter. Butter is manufactured from the

fresh cream of the milk. The raw milk is weighted and poured into cream of the

milk separated. Pure fat or cream gets separated from the milk. Then colored

salt is added in them to make butter. The processing of butter takes 7 minutes.

The process of butter making is continuous and almost 30

tones of butter is packed each day. Butter is the moved on the conveyor belt to

pack it in 100 grams packing. The butter packets are then automatically moved

into a box which will contain specific no. of butter packets as specified by the

computer programme formerly.

2. MILK POWDER :

Standardized milk is first of all heated under vacuum and

extra water of milk is evaporated from the condensed milk. This process is

done in a triangle shaped machine. When milk is heated, the milk takes the

form of drops. Then these drops are sprayed so that they became solid through

the triangle shaped machine. This powder is then packed through an automatic

packing machine Amul has the capacity of manufacturing 60 lakhs tons of milk

powder everyday.

3. GHEE :

Sour milk is used for the production of ghee. This milk is

sent to the cream machine for collecting cream. Cream is converted into butter

and butter is heated to make ghee. Ghee is then packed in tins or plastic bags

in the packing of 0.5,, 1, 2, 3, 4, 5, and 15 kg.

PROCESS FLOW CHART :

RAW CHILLED MILK IN TANKERS

FILTER

BUFFER TANK

MILK CLARIFIER

RAW MILK SILO

BALANCE TANK OF PASTURISER

1ST REGENERATION SECTION OF MILK PASTURISER

CREAM SEPERATOR

SKIM MILK CREAM BALANCE TANK

PASTURISERCREAM PASTURISER

BULK STORAGE TANK CREAM STORAGE TANK

ISSUED TO ISSUED TO BUTTER SECTIONPOWDER SECTION

FLOW DIAGRAM :

MILK RECEPTION QUALITY CONTROL LAB

PROCESSING

SKIM MILK CREAM

POWDER PLANT MARKET DISPATCH BUTTER

GHEE ASP PLANT PLANT

DAIRIES SMP

WMP SELLING SELLING

AMP

INTERRELATIONSHIP OF PRODUCTION DEPARTMENT

The production is the heart of organization. Production

makes possible sales and profit. The work of production department is not

limited to production lonely. Now a days production department has to do lots of

works. The production department helps in co-operative work of different

department. The smooth running of any organization is possible only with

interrelated work of all departments.

In Amul all the departments are interrelated. They

depend on each other for completing work. For example, if production

department want to produce bulk quantity but there is not adequate funds then

problem arise. On the other hand if production department does not produce

any thing then sales revenue is not possible, so finance is also not possible.

Here, we saw how each departments are depend on each

other.

Relation between different department :

1.purchase and production department :

The purchase department purchase the engineering

equipment and packaging material. For the purchase milk there is a separate

department known as MILK PROCUREMENT. Purchase department purchase

packaging material and engineering equipment according to requirement. And

this keep continuous production flows.

3. production and sales department :

In Amul there is not forecasting of demand of raw

material, because everyday milk is procured and production is done. The

produced product like butter, cheese are stored in the store room. The store

room are equipped with the chilling machine. So in Amul the sales is done

according to production.

4. production and marketing department :

The Amul has separate department for the marketing. This

federation of marketing is known as GCMMF. In the Amul GCMMF forecast the

possible sales in the future and make report on it. This report is sent to the

production department and production department produce accordingly. This

quota is generally related with storable milk product except milk, butter milk,

masti dahi [CURD ]

FINANCE DEPARTMENT :

INDEX

Sr.no

PARTICULARS

1. ORGANISATION OF FINANCE AND ACCOUNT DEPARTMENT

2. FINANCIAL PLANNING.

3. CAPITALISATION

4. MANAGEMENT OF FIXED ASSETS.

INTRODUCTION OF FINANCE DEPARTMENT :

Finance department is that managerial activity concerned

with the planning and controlling of the firm’s financial resources. Among all

the 5 Ms, i.e. man, money, machine, material and market. Money plays a vital

role ion the organization. Finance is the life blood for the success of an

organization. For the organization to grow and develop an even basis,

availability or finance on adequate basis is the prime requirement.

The financial management involves critical decisions on

which the very survival of the organization depend. The main financial

decisions are as follows.

1. Investment decision.

2. Financing decision.

3. Dividend decision.

Financial decisions are thus very crucial and important,

decisions for the firm. The main function of finance department is to tackle

The day to day financial requirement and other short term and long term

expenses, which an organization incur quite often.

All the other department of the organization strongly

depend upon the finance department to carry on their departmental activity

efficiently. Hence it is the responsibility of the finance manager to manage the

finance function with proper care. Adequate financial availability in time in the

organization would lead to organizational success and the failure to manage

finance will thus lead to inefficiency.

ORGANISATION OF FINANCE DEPARTMENT :

Finance management is vital as well as crucial part of

management as whole and involves planning, allocation of resources and their

control. The ultimate responsibility of finance decisions lies with the top

management. The nature of finance organization differs however from firm to

firm.

The complex and important financial decisions are taken

by the top management and other decisions are taken by middle level

personnel. The account department is divided in to various other sections like.

1. Milk billing. 2. Pay roll.

3. Sales billing.

4. Costing.

5. Cash and bank.

6. Book writing.

7. Data processing.

The organization structure, which Amul has adopted is as under.

MANAGING DIRECTOR

GENERAL MANAGER.

MANAGER.

DEPUTY MANAGER.

SUPERINTENDENT.

DEPUTY SUPRITENDENT

SENIOR OFFICER.

ASSISTANT OFFICER.

WORKERS.

FINANCIAL PLANING :

Planning is the most important and essential function for

every organization. The financial planning is essentially concerned with

economic procurement and profitable use of funds and to get maximum

possible return on investment. Financial plan is continuous process in the day

to day administration of a business. The responsibilities and authorities of

financial planning is with the general manager of finance.

In Kaira district co-operative producers union limited i.e.

Amul, the authorities and responsibilities are handle by the manager of

accounts.

The monthly basis planning is done in Amul. But the

financial planning is done through the NDDB [NATIONAL DAIRY

DEVELOPMENT BOARD ]

In Amul, equity shares, debentures, loans, and fixed

deposits are the main sources of finance, the organization issues the

debentures and equity shares only to the members of the societies. New

launched plant Amul-3 with the expense of 120 crores was financed by the N D

D B.

CAPITALISATION :

Capitalization comprises of a company’s ownership capital

which includes capital stock and surplus in whatever form it may appear and

borrowed capital which consists of bonds or similar wideness of long term debt.

The need for capitalization arises in all the phases of business cycle.

Estimation of total funds or capital arise sin the initial stages to start

requirement arises to make investments on capital assets. Funds are also

needed to meet working capital.

There are mainly two methods to arrive at capitalization.

1. COST METHOD.

2. EARNING METHOD.

The Amul being a co-operative firm and also that lack of

information. It can not arrive at capitalization calculation. However the above

methods are used for those companies who are new one.

There are two types of capitalization which are mentioned

as follows.

1. OVER CAPITALISATION.

2. UNDER CAPITALISATION.

A company is said to be over capitalized when its earning

are not large enough to yield a fair return on the amount of issued securities

and long term borrowing, in other words, a business can be said to over

capitalized when capitalization exceeds the real economic value of its assents,

A corporation may be under capitalization when the rate

of profit is exceptionally high in relation to the return enjoyed by same

companies in the same industry or it has too little capital to conduct business.

Under capitalization implies an effective utilization of finance, a high rate of

dividend and enhanced price of shares.

Looking at the figures, it seems that the Amul has adopted

the capital structure in which there is higher ratio of the borrowed capital than

the own capital. The net profit for the year is also very less, but this is because

Amul distributes all its profit amongst its members.

MANAGEMENT OF FIXED ASSETS :

At Amul, under the flood program, most of plant and

machineries are provided through N D D B. amul gets 30% grant and 70% loan

at interest tare of 10%. However, Amul is bound to follow the certain terms and

conditions. For the first three years under monitorial period on which interest is

calculated and for remaining 123 years half yearly installment is made. Long

term fixed capital is capitalized through share capital. Dividend rate is 12%.

Sometimes it is encouraged by increasing dividend rate from 12 to 15 % to

those who provide milk. Debenture of short term cum long term, fixed deposits

etc, are issued in which minimum 90 days and maximum 3 to 5 years duration

is there. Interest is provided at 0.5% more than the co-operative bank’s loan.

However, for the management of fixed capital like plant,

machinery etc, Amul obtains long term loans from the N D D B. recently for

managing the new plant Amul 3, for the installing and maintaining of it requires

large amount of money. All these amount is borrowed from the N D D B.

Amul has get some long term investments also which

would help the management of such fixed capital. Amul has share investments,

investments in national saving certificates, fixed deposits and other investments

with the unit trust of India bank [ UTI ]. Such investments are useful in the

maintenance of fixed assets.

SPECIAL REPORT ON FINANCIAL MANAGEMENT IN AMUL

INDEX

SRNo.

PARTICULARS

1. INTRODUCTION OF FINANCIAL MANAGEMENT

2. IMPORTANCE OF FINANCIAL MANAGEMENT

3. OBJECTIVES OF FINANCIAL MANANGEMENT

4. CAPITAL BUDGETING

5. MANAGEMENT OF WORKING CAPITAL

6. INVENTORY MANAGEMENT

7. MANAGEMENT OF RECEIVABLES

8. CASH BUDGETING

INTRODUCTION OF FINANCIAL MANAGEMENT :

Finance is the foundation stone of every business in the

present day set up. No business can be started without adequate finance nor it

can be developed. The success of every business depends upon adequate

source of finance. The financing of sole trade and partnership in not difficult as

the main source of finance is their own contribution and financial requirements

are limited. In the present modern set up generally business are raw by big

companies whose financial requirement are large volume of finance which can

not be contributed by few investors.

Finance management is a managerial activity which is

associated with planning and controlling of company’s financial resources. The

financial resources are always scarce and limited which needs proper planning

and control in order to achieve the best result out of the complex situation of

risk and uncertainly prevailing in the business world.

Financial management involves the application of general

management principles to a particular financial operation. It is concerned manly

with raising funds in the most economic and suitable manner, using these funds

as profitable as possible. It provides best guide for future resource all allocation

by a firm,. Financial management is associated with designing and

implementation and projects. Plan aim at an effective utilization of funds.

IMPORTANCE OF FINANCIAL MANAGEMENT :

Proper finance is the real key to the success of any

business enterprise. Without proper finance no business can survive nor it can

expanded and modernized. It is the finance which works like a lubricant which

keeps the organization dynamic. Keeps men and machine at work. The

following are the points highlights the importance of finance.

1. Finance for business promotion.

2. Finance management for optimum use of firm.

3. Use for co-operation in business activities.

4. Useful in decision making.

5. Determinant of business success.

6. Measurement of performance.

7. Basis of planning, co-operation and control.

8. Useful to shareholders and investors.

OBJECTIVES OF FINANCIAL MANAGEMENT :

The financial management of a firm has to make three

important decisions viz. 1. investment decision i.e. where to invest funds and to

what amount? 2. Finance decisions i.e. where to raise funds and in what

amount ? 3. Dividend i.e., how much to pay in dividend and how much to

retain.

In order to make these decisions rationally, the

management must have a clear understanding of the objectives which are

sought to be achieved. It is generally agreed that the financial objectives of the

firm should be the maximization of owner’s economic welfare. However, there

may be disagreement on how to maximize the owner’s welfare. There are two

widely discussed approaches of criterion or goals of maximizing owner’s

welfare 1. profit maximization and 2. wealth maximization. It should noted here

that objective is used in the sense of a goal or decision criterion for the three

decisions involved.

In the Amul the main aim of the co-operation is the

“WELFARE OF SOCITIES “ For the welfare of societies’ member the profit is

must. So the Amul’s main aim is profit maximization. The Amul follow the step

by which it can earn higher profit and can distribute the maximum return to its

members.

CAPITAL BUDGETING :

Capital budgeting is also one important decision for the

management. Capital budgeting decision may be defined as the firm decision to

invest its current fund most deficiently in lying of expected over a service of

years.

The capital budgeting of the firm include many decisions

which are as follows.

1. Mechanization of process.

2. Replacing and modernizing a process.

3. Choosing a proper alternatives.

4. Introducing a new product.

5. Expanding of business.

6. Modification and replacement of fixed assets.

In Amul for new advancement different techniques of

capital budgeting are being adopted for calculation the role of return debt

services ratio and for choosing any project. These are put up to the Board Of

Director for their approval of proposed project.

The Amul adopts the fast changing technology and

modernization in business to survive in the competitive world and to increase its

sell of its products. So, they specially take care of the capital budgeting

because that is very essential for the organization.

MANAGEMENT OF WORKING CAPITAL :

Working capital generally refers to ratio of current assets

to current liabilities. It is referred to as the capacity of the firm to meet its day to

day obligation. A firm is bound to have enough amount of working capital in

hand to meet with short term expenses of the firm. Generally, investment in

working capital and the current assets can be sold easily when ever the need

for money arises. This would ensure the easy availability of fund to meet the

short term liabilities in order to have enough amount of working capital and to

relieve the locking up of funds in current liabilities for this, the firm has to

manage receivables properly.

So for as Amul is concerned most sale of Amul is on cash

and carry basis thus raising no question of managing receivables. Thus, very

little amount is bound in the current liabilities. On the other side to meet the

short term expenses of Amul, Amul takes the short term loan from unit trust of

India [UTI ].

Amul dairy’s main sale is done through GCMMF. There is

no credit period with the federation. The GCMMF is owned by 11 union

members and wholesale dealers. Requirement of working capital is required

more in winter season. To meet this working capital requirement, Amul has get

certain short term investments and provisions from the monthly sale, the

GCMMF gives the return to the Amul from which it covers up its short term

expenses. Thus working capital is very easily managed.

INVENTORY MANAGEMENT :

Inventory generally refers to the stock of raw material. In

this sense inventory management would refer to the management of current

assets and other materials inside the organization. Inventory management is

very necessary for the firm because if the firm has lesser investment in

inventory, this would lead to unavailability of materials when required. This

would ultimately lead to interruption in production process. However, if the firm

has higher investment in inventory this would lead to unnecessary locking up of

funds in inventory, thus reducing the working capital. Hence the inventory

should be managed properly in every organization.

At all the plants of Amul and KAIRA DISTRICT CO-

OPERATIVE SOCIETY inventory is classified mainly in five heads.

* Raw material.

This raw material can be classified as under.

General material.

Engineering material.

Pack material.

Stores and spares.

Finished products.

Work in progress.

Since all is working on continuous basis, it is bound to

have enough amount of inventory in stock to ensure smoothness in production

with out any interruption. To ensure timely availability of milk, Amul; brings milk

every day from the 1059 villages surrounding the Kaira district. To stored the

raw milk, Amul has already provided chilling centers at the village co-operative

unions. And to store the processed milk, Amul has developed eight milk storing

towers, each having the capacity of storing 1.5 lakhs liters of milk. The

processed milk is sold out in the Kaira and Anand district and the remaining

stock of milk is used to produce other milk products. Thus inventory

management is very sound as Amul.

MANAGEMENT OF RECEIVABLES :

Management of receivables is also the most important

segment of working capital. In any organization the main objective of purpose

is, to attain maximum sales with minimum cost of credit and collection, of

management of receivables. Trade credit is the most prominent force of the

modern business. It is considered as an essential marketing tool, acting as a

bridge for the movement of goods through production and distribution stages to

customers.

Trade credit creates receivables as book debit, which the

firm is expected to collect in the near future. The main receipts comes from two

sources as follows.

1. Federation.

2. Army.

95% of nutramul is sold to army and from Army the

organization collect the check of money as receipts. FDS are also the mean of

receipt when the FDS of the Amul in different banks like K.D.C.C.BANK, UTI

BANK, etc, are matured then the organization gets the receipts. The interest of

the money is also the part of receipts of the organization and other parties is

also the mean of receipts.

The credit policy is determined by Amul but sometimes

there is no perfect credit policy when the parties want to pay their amount due

they are given the time period according to their convenience.

CASH BUDGETING :

“Cash in the business enterprise may be compared to the

blood of human body.” Blood gives life and strength to human body and cash

imparts profits and solvency to the business organization.

Cash management is concerned with the managing of

1. Cash flows in to and out of the firms.

2. Cash flow within the firm and,

3. Cash balance hold by the firm at the point of time.

Cash management is very impotent because too little cash

may place the firm in illiquid position which may force the creditors and others

to stop transacting with the firm.

Too much cash leads the fund to be lying idle. Because of

this over all return on capital will decreased. Amul plant its cash requirement on

a short run basis cash and bank during the year.

SWOT ANALYSIS

STRENGTH

1 Good technical as well as managerial team and dedicated work force2 Well established Brand name 3 Excellent distribution channel4 Market leader in most of their product in asia 5 WEAKNESS

1

OPPORTUNITIES1 Mostly amul product was used and sold in big cities or small town so

there are more opportunities in village area where amul product or we can say milk product still not available in many remote area .

THREAT

1 local dairy which work in very small scale but capture more market compare to its size.